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In ordering arbitration of an employment dispute, a California federal district court upheld the arbitration agreement over the employee’s unconscionability challenge, noting that the applicable arbitration rules would require the employer to pay the bulk of the arbitration costs.
In Carlile v. Russ Berrie and Co., No. SACV 08-0887 AG (RNBx), 2008 WL 4534281 (C.D. Cal. Oct. 6, 2008), Carlile was employed by Russ Berrie as a sales representative. After Carlile allegedly sent a letter to management criticizing its “bonus plan,” Russ Berrie terminated Carlile. Carlile sued Russ Berrie for unlawful retaliation and wrongful termination, and Russ Berrie moved to compel arbitration in accordance with an arbitration agreement between the parties.
In opposing arbitration, Carlile first argued that the agreement was unenforceable because she never intended to arbitrate her claims. The Court flatly rejected this argument, noting that Carlile was bound to the agreement whether or not she read or understood the agreement she had signed.
Carlile also argued that the agreement did not comply with the minimal requirements for employment arbitration in Armendariz v. Found. Health Psychcare Servs., Inc., because it required the employee to pay “unreasonable costs.” 24 Cal.4th 83, 102-03 ( Cal. 2000). The Court disagreed, noting that the rules invoked by the agreement required Russ Berrie “to pay the arbitrator’s fees and the bulk of the costs of arbitration,” thereby satisfying Armendariz.
Accordingly, the Court granted Russ Berrie’s motion to compel arbitration and stayed litigation.
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